"In 2011, Cost of Government Day
falls on August 12.
Working people must toil 224 days out of the year just to meet all costs
imposed by government,
a full 27 days longer than 2008.
In other words, in 2011 the cost of government consumes 61.42 percent of
national income."
Music
by Jimmy Buffett, "Come Monday," 1987
The drama of the last-minute vote
to increase the debt ceiling by $2.5 trillion has
focused on projected deficits of the federal
government and how they will add to the national
debt. Those numbers are large. The national debt was
$10 trillion when President Obama was inaugurated
and is expected to be $15.5 trillion at the end of
the year.
Yet focusing on the deficit
understates the true cost of government. In fact,
this year's deficit of $1.5 trillion is "only" 40%
of federal spending. And while federal spending has
jumped to $3.8 trillion in 2011 from $2.9 trillion
in 2008—a 31% increase—that does not include state
and local spending, which is estimated to total $1.6
trillion in 2011, according to new report from the
Americans for Tax Reform Foundation (ATRF). Nor do
these numbers include the cost of individuals and
businesses complying with federal regulations: The
total cost of such compliance is estimated to be
$1.8 trillion....
To more accurately measure the
true cost of government, ATRF has calculated a Cost
of Government Day. We determine this each year by
adding the cost of government spending at all levels
to a conservative estimate of all regulatory
burdens—and then counting how many days of the year
Americans work to pay the costs of government.
The Tax Foundation divides total
federal, state and local taxes by total national
income to come up with Tax Freedom Day. This year
America worked until April 12 to pay all taxes.
When you include the costs of
federal deficit spending and the regulatory burden
this year, however, you don't reach the Cost of
Government Day until Aug. 12. Americans will work
for 103 days to pay for federal spending, 44 days
for state and local spending and 77 days to cover
the cost of the regulatory burden....
Looking at the total cost of
government rather than merely the annual deficit
gives a more complete picture—and a more frightening
understanding—of how much government costs each one
of us. It also suggests how clever politicians can
hide the cost of government, disguising increased
spending by urging us to focus on the deficit and
then "paying for" higher spending with higher taxes.
Government grows but the deficit is unchanged.
First a little background and insight.
Grover Norquist and his dad, Warren from Weston, have been CLT
members forever, from the beginning. Grover as a college student
hung out in the old CLT office in Boston helping out however he
could. From there, he went to Washington, founded and made his
reputation as president of Americans for Tax Reform (ATR). ATR
co-sponsors Chip Faulkner's "Friday Morning Group," a monthly
meeting of the state's most prominent center-right organizations and
activists. According to ATR, ours is one of if not the most
successful in states across the nation. It was Grover who
first initiated the "Taxpayers Protection Pledge" decades ago.
On the ATR website, it's noted:
The Origins of the Tax Me More Fund
Massachusetts, specifically the taxpayer group Citizens
for Limited Taxation (CLT) was a leader in developing a
tax me more fund proposal in 2000-2001 (although Gov.
Huckabee created the AR fund before it was approved in MA).
After succeeding in reducing income taxes in a 2000
referendum, the Voluntary Optional Tax Endowment (VOTE) was
a way for opponents to voluntarily pay at the old rate. The
legislature added a checkbox on its state tax forms in 2001
that allows the taxpayer to decide which tax rate he wants
to pay: 5.3% or 5.85%
Tax Freedom Day this year reached us
Massachusetts taxpayers two days later than the national average.
(See:
CLT News Release - Monday, April 11, 2011: "Tax Freedom Day in
Massachusetts two days later than U.S.") But taxes make up
only a part of the cost of government. Regulations, and their
actual costs, are an additional factor. This is what the Cost
of Government Day factors in. For years ATR has been
documenting things like how much regulations add to the cost of
simple things like the cost for a loaf of bread.
Where does Cost of Government Day (COGD) place
Massachusetts?
Massachusetts
Rank in 2010: 44
Rank in 2011: 40
# of Days Worked: 227
State's Cost of Government Day: 15-Aug
MA — 11th latest, behind only:
CT
NY
MD
DC
WI
WA
MN
CA
IL
PA
This means we Bay State taxpayers must work another three days more than the national average to pay
for our cost of government within our borders on all levels.
Our personal COGD doesn't arrive until next
Monday.
But then, we were two days behind Tax Freedom Day
as well.
ATR's COGD report notes:
As of March 2011, state and local governments
have an outstanding debt of $2.447 trillion. Furthermore, state
and local governments are facing a $3.1 trillion shortfall in
projected pension spending—a shortfall of $21,500 for every US
household. These liabilities are government worker pension
promises that outpace the size of financial assets held by state
and local governments. State and local governments’ unfunded
liabilities comprise a massive 22 percent of GDP....
However, the true $3.1 trillion cost of state
and local government promises continues to be masked with
accounting gimmicks. States are significantly overestimating the
rate of return on their pension assets....
The problem of overpaid public workers bleeds
into state and local government budgets. The Bureau of Labor
Statistics found that: “Total employer compensation costs for
private industry workers averaged $28.10 per hour worked in
March 2011. Total employer compensation costs for state and
local government workers averaged $40.54 per hour worked in
March 2011.”
State and Local Employees
Massachusetts
State: 126,900
Local: 268,700
Total: 395,600
COGD – Massachusetts
▫ Every year Americans for Tax Reform calculates the Cost of
Government Day (COGD), the date of the calendar year on which
the average American worker has earned enough gross income to
pay off his or her share of spending and regulatory burdens
imposed by all levels of government, federal, state and local.
▫ On August 12th, 2011 the average American
will have worked enough days to pay for their share of
government spending and regulations. This year’s national Cost
of Government Day is 2 days earlier than 2010 date of August
14th.
▫ Unfortunately for the residents of
Massachusetts, their Cost of Government Day falls three days
after, on August 15th.
▫ This means that
taxpayers in Massachusetts must work 227 days out of 2011 just
to pay for the cost of government.
▫ 39 states work fewer days than
Massachusetts to pay for the cost of government.
▫ The residents of Massachusetts work three
days more than the average American to pay for the cost of
government. They are saddled with cumulative tax increase of
about $8.52 billion from FY2002-FY2011.
▫ That amounts to a tax increase of $1,285.40
for every man, woman and child in Massachusetts over the last
ten years.
So congratulations, come Monday. On August
15th every cent we've earned thus far this year will have finally paid off our share of the cost for running
government; federal, state, and municipal. Come Monday we can start
keeping whatever we earn for the remaining four and a half months of
the year, lucky us!
Happy Cost of Government Day! You Worked for It
From Jan. 1 until today, every penny Americans earned paid for
federal, state and local spending and regulations.
By Grover Norquist
The drama of the last-minute vote to increase the debt ceiling by
$2.5 trillion has focused on projected deficits of the federal
government and how they will add to the national debt. Those numbers
are large. The national debt was $10 trillion when President Obama
was inaugurated and is expected to be $15.5 trillion at the end of
the year.
Yet focusing on the deficit understates the true cost of government.
In fact, this year's deficit of $1.5 trillion is "only" 40% of
federal spending. And while federal spending has jumped to $3.8
trillion in 2011 from $2.9 trillion in 2008—a 31% increase—that does
not include state and local spending, which is estimated to total
$1.6 trillion in 2011, according to new report from the Americans
for Tax Reform Foundation (ATRF). Nor do these numbers include the
cost of individuals and businesses complying with federal
regulations: The total cost of such compliance is estimated to be
$1.8 trillion.
Focusing national attention on the deficit rather than on the total
cost of government—federal, state and local spending plus the cost
of the federal and state regulatory burden—causes several problems.
First, it deliberately understates the true cost of government. It
also allows advocates of ever-larger government to misdirect our
attention away from the bigger picture to just "the deficit." And
there are ways to dramatically increase the cost of government
without adding to the deficit: new regulations and new spending
programs matched with higher taxes. (Think ObamaCare and
cap-and-trade rules from the Environmental Protection Agency.)
To more accurately measure the true cost of government, ATRF has
calculated a Cost of Government Day. We determine this each year by
adding the cost of government spending at all levels to a
conservative estimate of all regulatory burdens—and then counting
how many days of the year Americans work to pay the costs of
government.
The Tax Foundation divides total federal, state and local taxes by
total national income to come up with Tax Freedom Day. This year
America worked until April 12 to pay all taxes.
When you include the costs of federal deficit spending and the
regulatory burden this year, however, you don't reach the Cost of
Government Day until Aug. 12. Americans will work for 103 days to
pay for federal spending, 44 days for state and local spending and
77 days to cover the cost of the regulatory burden.
This is the third year in a row that Americans will work into August
to pay for the cost of government. Before 2009, the day never fell
later than July 21. Looking back, we see that the Reagan years held
the Cost of Government Day steady at July 4. Under the first
President Bush, it moved forward 15 days. But Americans gained 15
days when the day moved back in the last six years of divided
government with a Republican Congress against President Bill
Clinton.
During the presidency of George W. Bush, however, Cost of Government
Day moved forward to July 16 in 2008, from June 28 in 2000, costing
taxpayers 18 days of extra labor. Since he took office, President
Barack Obama has pushed the day all the way forward to Aug. 12. In
other words, Americans are now working 27 more days per year to pay
for government spending and regulations than on the day Mr. Obama
became president.
Looking at the total cost of government rather than merely the
annual deficit gives a more complete picture—and a more frightening
understanding—of how much government costs each one of us. It also
suggests how clever politicians can hide the cost of government,
disguising increased spending by urging us to focus on the deficit
and then "paying for" higher spending with higher taxes. Government
grows but the deficit is unchanged.
Regulations do not even show up in the federal budget and are rarely
covered on the nightly news. But this year they will cost Americans
$2.8 trillion, consuming 77 days of labor for the average worker.
More than two months a year we work just to pay the bills imposed on
us by the EPA and other expensive regulators.
The new rule established by House Speaker John Boehner is that any
debt-ceiling hike must now be matched by spending cuts of at least
the same size, and the Republican rejection of any tax increase
constrains the president's ability to further hike spending and
debt. So look out for the Obama administration to focus on expanding
government through increased regulations.
The watchdog media report relatively well on the White House and
Congress. But they don't have the bandwidth to report on, never mind
to critique, the explosion of regulations underway. Mr. Obama is
counting on this.
Mr. Norquist is president of Americans for Tax Reform.
NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
